9/20/2017
FundFire - Managers Tiptoe into Blackstone, Carlyle Marketing Mode Print Issue
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Managers Tiptoe into Blackstone, Carlyle Marketing Mode By Tom Stabile September 20, 2017 Private equity managers are inching toward using content marketing models common across the asset management industry, following a path set by Blackstone Group and Carlyle Group, which have already embraced tactics to broadcast white papers, podcasts, videos, and other research and knowledge resources. Marketing consultants and platforms say more private fund firms are moving past questions over whether to act and onto ideas for how to start. The shift still requires commitment from an industry that until recently had avoided nearly all brand messaging and general marketing beyond investor relations or fundraising efforts. Firms are likely to soon herd forward, says J.D. David, COO at Meyler Capital, a marketing consultant. “In the next two to five years, there’s not a question private equity firms will be actively marketing this [way],” he says. “And even if you choose not to, investor demographics will force you to make that change.” The largest firms have dabbled in content marketing that promotes their private equity expertise and knowledge generally, instead of only producing pitchbooks, data rooms, and letters around raising capital for specific funds. Oaktree Capital Management, KKR, and Bain Capital have regular features, as reported, though not to the extent of Blackstone and Carlyle, which produce streams of material in the mold of mutual fund powerhouses. A handful of consultants, marketers, and content platforms are betting more private equity managers are set to follow and offering tools to produce content, create profiles, and distribute material to investors. They include iCapital Network, a platform delivering alts products to advisors; Mercury Capital’s new iFunds offering, which the placement agent built for advisors; Harvest Exchange, a content marketing platform that publishes manager posts in various media; and Asset.TV, which creates video channels for managers. Harvest, with a social media-style format of feeds and customizable profiles, is having more discussions with private equity managers, with some having made initial steps, says Peter Hans, the platform’s CEO. It hosts a main site for all users – including institutional investors – and customized versions controlled by managers. “It’s changing very quickly for the private funds world,” he says. Their output to date on the site has largely been investment research pieces, such as with a limited profile page Carlyle has created, though other users often post materials from firms such as KKR. Content sites likely aren’t getting regular visits from institutional investors or consultants today in a market still led by referrals, relationships, and longstanding ties. The concept of using such platforms hasn’t caught on yet, says Michael Rosen, CIO at Angeles Investment Advisors, a consulting firm. “Particularly in the private equity world, it’s still very much relationship-oriented,” he says. “We may… take a look at this, but we haven’t yet.” http://www.fundfire.com/pc/1744453/205173
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9/20/2017
FundFire - Managers Tiptoe into Blackstone, Carlyle Marketing Mode Print Issue
That shift may instead come as younger institutional investor analysts and portfolio managers rise up the ranks, Meyler’s David says. “This is how today’s 20- and 30-year olds access content and resources and make decisions,” he says. A private equity manager that isn’t struggling to raise capital today probably doesn’t need to make a big content marketing push, but still should consider it, says Mike McLaughlin, partner at Naissance, a marketing consultancy. “In the private equity world, you’re not looking for scale in terms of reach, and you don’t need to change if all stays the same,” he says. “But if you want to expand your [client base], and even to look at the retail market, there really isn’t a lot of downside to this.” Private fund managers that today post research papers on their sites routinely complain they got only 15 clicks and abandon the effort, McLaughlin says. Putting that material on wider platforms makes sense, he says. “It’s hard to get people to come to you,” he says. The basic case for embracing content marketing is that average consumers have changed how they seek information and do transactions, and that private equity firms sticking with old models may lose touch with future investment decision makers, especially in competitive or challenging times. “You can’t expect a long-term relationship to be built around one person asking another for money every few years,” David says. “You have to develop trust and appear professional and relevant and credible.” Private equity is also an industry that now has thousands of firms, and with decision makers at institutions changing jobs and organizations more frequently, managers will find it harder to cut through the crowds and make lasting connections, David says. That should push fund managers to not only pursue content marketing but also to use analysis tools, says Joe Bartolotta, chief marketing officer at Meyler. Few managers will ever develop what digital platforms should offer – advanced analytics to form richly detailed profiles about individuals or investor types, much in the way Amazon and Netflix use customer data for strategically targeted pitches, he says. “It’s a question of being able to get data about your prospects’ behavior and interests,” he says. “Are you sure your message is reaching the people you want, and engaging them in the way you think it is? You could easily go astray if you’re not confirming it, and you don’t have to guess... It’s a testable proposition.” Harvest’s toolset, for instance, allows managers to dive into analytics based on advanced artificial intelligence and cross-referencing methodologies that can track users’ preferences for content and how they access it, Hans says. “The CIO of Yale [University’s] endowment has demographic characteristics… and you can look at what the CIO shares with peers,” he says. These platforms also can leave “bread crumbs” leading investors back to a manager’s website, where user data can be finely processed and pitches sharpened, Bartolotta adds. “When you’ve got them in your crosshairs you can study them,” he says. “You can be very strategic about where you spend your time.” FundFire is a copyrighted publication. FundFire has agreed to make available its content for the sole use of the employees of the subscriber company. Accordingly, it is a violation of the copyright law for anyone to duplicate the content of FundFire for the use of any person, other than the employees of the subscriber company. An Information Service of Money-Media, a Financial Times Company
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